Your FAKO credit score is very important – but not for the reason you think it is. Since you may not be too familiar with the term, let’s break it down starting now.
What is a FAKO score?
FAKO is the mix of two words: Fake and FICO. Different companies have come up with different credit scoring systems of their own in hopes of convincing you to pay for the score on a one-time or monthly basis. The scores are referred to as FAKO scores because they aren’t the true scores looked at my lenders to make a decision as to whether or not to loan you money. The term used by the fake score industry is “educational score” since it just informs you of a score rather than lets a lender make a lending decision.
You actually have many credit scores and it can be confusing because you might have a good score in one system and a fair score in another. Which one is right? If you are trying to bump up your credit score, knowing which one to focus on is paramount.
FAKO vs. FICO Credit Scores
The credit score you should be focusing on is the one generated by the FICO company (formerly called the Fair Isaac Corporation). Your FICO score is the one used by lenders and insurance companies to determine what loan rates and insurance premiums to charge you.
But even the FICO scoring system technically has multiple scores. The various scores have been created to serve specific industries. The mortgage industry gets a slight variation on your FICO score based on the qualities a mortgage lender looks for. Likewise an automobile loan institution would get a modified version based on criteria that is important to that industry.
However, your FICO score is the one true score. The variations based on specific industry shouldn’t change too much between the FICO score you can purchase online and the one the lender sees. The FICO scoring range is 300 to 850. A good FICO credit score falls in the 720 and above range.
Are FAKO Scores Useless?
Just because a lender isn’t going to use a FAKO score to make a lending decision on you like they do with a FICO score doesn’t mean that one of the many fake scores isn’t beneficial to you. You just have to be careful and not put all your eggs into one basket in terms of trusting the score.
The best way to use a FAKO score is to track your score over a long period of time. There is no guarantee a fake score will be in the same ballpark as your FICO score, but generally speaking you should expect it to be within 20 to 40 points of your actual FICO score.
If you track you fake score over a long period of time you will be able to see what increases and decreases your score based on how large your credit card balances are, when you pay off your bills, and so forth.
Even just knowing generally what your score could be is helpful. If your fake scores comes back as a 540 you know your credit is trashed. Even if the score was off by 50 points you would still be below 600 on a FICO score, which is a very poor score. Likewise if your fake score came back as 790 it isn’t a guarantee of an excellent credit rating under FICO, but it’s a good start. Even if that fake score was off by 70 points (to put you at 720 on a FICO scale) you would still be in good position to get the best rates possible.
Example FAKO Scores and Where to Find Them
Here are some places you can get your free FAKO credit score and what the ranges are.
Credit Karma (TransUnion)
Credit Karma provides three different scores: TransRisk New Account Score, VantageScore, and Auto Insurance Risk Score from TransUnion. The TransRisk score is on a scale of 300 to 850 just like the FICO score. This is a service you can get for free without signing up for any free trials.
VantageScore is a score that the three credit bureaus — TransUnion, Experian, and Equifax — came together to create. It used to have a scale of 501 to 990, but in 2013 it changed to be 300 to 850 to match the FICO score. As of this writing, CreditKarma still shows the old score range.
Credit Sesame (Experian)
Credit Sesame uses Experian’s National Equivalency Score that has a range from 360 to 840.
Of all the credit services available I like this best because they are completely free to use, you don’t have to sign up for free trials and they offer a great deal of useful information on how to reduce your cost of debt.
Quizzle and CE Score
Quizzle uses something called a CE Score that is based on your Experian credit report and developed by CE Analytics. The range is 350 to 850.
Final Thoughts on FAKO Scores
Don’t blindly trust a FAKO score, but don’t completely discount them either. If you need to track your score over the long term to get a general feel of the ups and downs of your score, a FAKO score is a free and easy way to do that.
However, the ranges on FAKO scores don’t always match up to your FICO score so you can’t trust the number alone. Even with the FAKO scores that have ranges identical to FICO, the FAKO score will never be used in a lending decision. Only your FICO score will be used and to get that you have to buy it from myFICO.
All of this leads to a lot of confusion when trying to understand what your score is and how to improve it. The only true way to do that is to pay off your balances, get current on your bills, be consistent with your payments over time, and be patient
Do you know your FAKO credit score? Where did you obtain it? How did it help?
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